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Refurbished Disposable Cameras Infringe Fuji’s Patents

03-1324
January 14, 2005

Decision icon Decision

Last Month at the Federal Circuit - February 2005

Judges: Rader (author), Clevenger, and Linn

In Fuji Photo Film Co. v. Jazz Photo Corp., No. 03-1324 (Fed. Cir. Jan. 14, 2005), the Federal Circuit affirmed a district court’s decision finding that Defendants’ refurbished disposable cameras infringed Fuji Photo Film Company, Ltd.’s (“Fuji”) family of U.S. patents directed to disposable cameras.

The refurbished disposable cameras at issue, otherwise known as lens-fitted film packages (“LFFPs”), are generally made in China from used camera shells. The infringement issue turned on whether the refurbishing of the used LFFPs constituted a permissible repair or an impermissible reconstruction. In Jazz Photo Corp. v. International Trade Commission, 264 F.3d 1094 (Fed. Cir. 2001), the Federal Circuit had previously found that an eight-step refurbishment procedure constituted a permissible repair.

In this case, the district court determined that the nineteen steps of refurbishment were substeps of the eight steps that the Federal Circuit had previously deemed permissible repair. The evidence showed that these nineteen steps were performed at three of eight Chinese factories and inferred but did not demonstrate that the steps were performed at the remaining five Chinese factories. The district court also ruled that only LFFPs refurbished from shells first sold in the U.S. were entitled to the repair doctrine, which was approximately 9.5% of refurbished cameras. The district court determined that the evidence supported a finding that just under 400,000 LFFPs fit the criteria for defense to infringement. The jury then found that almost four million LFFPs were not subject to the repair defense and found damages of almost $30M.

On appeal, Jazz Photo Corporation (“Jazz”) contends that its evidence showed that 100% of all LFFPs are permissibly repaired. At trial, Jazz had presented a videotape depicting the refurbishment in one of the eight Chinese factories. Jazz relied on the testimony of its current chairman, who testified that some or all of the nineteen refurbishment steps were performed at all eight factories. The chairman, however, had only visited three of the eight factories. The Federal Circuit determined that the district court did not clearly err in refusing to draw an inference about the five factories of which no Jazz representatives had personal knowledge. The chairman had also admitted that the processes at the eight factories differed somewhat. Thus, Jazz’s proof that the permissible nineteen steps were performed at all eight factories was incomplete.